GROUP 4 - PAN AH BA & ANOR v NANYANG CONSTRUCTION

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PAN AH BA & ANOR v NANYANG CONSTRUCTION SDN BHD 
[1969] 2 MLJ 181
FEDERAL COURT
GROUP MEMBERS
1. NURUL INSYIRAH BINTI AHMAD FAKHRURRAZI (1222164)
2. NURUL AIN MAISARAH BINTI MOHD REDZEI (1222155)
3. MUMTAZATUL 'ALIYAH BINTI MOHD AFFANDY (1222152)
4. NURHASLIZA FAZNI SYAFIKAH BINTI HASMADEE (1222166)
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FACTS OF THE CASE
The plaintiffs, administrators of the estate of Ng Lye Hoong, appealed against the High Court's dismissal of their claim for the return of a $10,000 deposit. Ng Lye Hoong, the deceased, had entered into an agreement to purchase a shophouse in Kuala Lumpur from the defendant company. The agreement stipulated a payment of $10,000 upon execution, with further installments due. The crucial clauses in the agreement outlined a 14-day period for signing a formal agreement, emphasizing time as essential.
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FACTS OF THE CASE
Despite multiple reminders, the deceased failed to sign the agreement and make subsequent payments. The defendant company, through a letter dated August 20, 1964, warned that failure to comply within seven days would result in the property being sold to other purchasers, with the deposit forfeited. The deceased, in response, requested the property be sold to others and her deposit returned. The High Court dismissed their action and they appealed to the Federal Court.
Deseased
Plaintiffs
Defendant
Ng Lye Hoong
Administrators of the estate
Nanyang Construction SDN BHD
Deseased
23 April
Defendant
 $10,000
During her life-time, the deceased executed a printed document which she confirmed her intention to purchase from the defendant company shophouse at a price of $88,750. She paid the defendant company $10,000.
Deseased
1 JUNE
Defendant
Notice
The defendant company sent a notice to the deceased requesting her to sign the formal agreement and to pay the sum of $18,910 to meet the second payment including solicitors' charges and stamp fees.
Deseased
Defendant
Not comply
Another letter dated 8th July and 5th August, 1964 was sent to her with a similar request. She acknowledged receipt of the letter but merely asked for a copy of the agreement for her perusal.
8th July
5th August
Deseased
20th August
Defendant
Deceased still insisted on having a copy of the agreement.
The defendant company wrote again to the deceased requesting her to sign the agreement and informed her that if she fail to do so within seven days of the date of this letter the defendant company will sell the property to other purchasers. 
Deseased
15th September
Defendant
The deceased requested the defendant to sell the property to other purchasers and to return her deposit of $10,000.
requested the defendant to sell the property to others
Deseased
 5th October
Defendant
The defendant company again wrote requesting deceased to go and sign the agreement. No reference to deceased's letter of 19th September was made.
Deseased
14th December
Defendant
 The defendant company wrote to deceased repeating its previous request and unless she signed the agreement before 20th December the transaction was to be cancelled and the deposit forfeited. 
The first time threat of forfeiture was brought to her.
Plaintiffs
Defendant
The plaintiffs sued the defendant company for the return of the deposit on the ground that the defendant company had rescinded the agreement 
1

ISSUE
Whether performance of promise dispensed with
Section 64 of the Contracts Act
1

LEGAL PRINCIPLE
“Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit".
Section 75 of the Contract Ordinance
2
Section 64(1) of the Contracts (Malay States) Ordinance
3
RATIO DECIDENDI
1. The judge refers to the Section 63 of the Indian Contract Act 1872 (corresponding to Section 64 of the Contracts Act 1950) where it states that "Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit."

RATIO DECIDENDI
2. Next, the judge also refers to the case of Chhunna Mal Ram Nath v Mool. Chand- Ram Bhagat where the Privy Council strongly dissented from the observations of Sir Lawrence Jenkins C.J. in Abaji Sitaram Modak v Trimbak Municipality where the learned Chief Justice took the view that in order to constitute a dispensation of a promise under Section 63 (corresponding to Section 64 of the Contracts Act 1950), neither consideration nor an agreement is necessary and there must a clear evidence that the promisee had so dispensed with the performance of the promise by a voluntary conscious act and it must be an affirmative act on his part.

RATIO DECIDENDI
3.  In the present case, when the deceased had failed to sign the agreement as requested by the letter of 20th August 1964, the defendant company had dispensed with the performance of the agreement by the deceased.

COURT DECISION
Appeal allowed: The respondent company had in their letter dispensed the deceased from performing her part of the contract and therefore the estate of the deceased was entitled to the return of the deposit.
Azmi LP :
• Defendant company return deposit  $10,000 to the Appelllants
• with interest 6% from the date of judgement 
• return deposit  $500 
Gill FJ :
• return deposit  $10,000
• with 6% interest per anum from 25th October 1968 to date of payment 
• return  $500 deposit
Lee Hun Hoe J 
• return  $10,000 deposit to the Appellant
• return  $500 deposit
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GROUP 4 - PAN AH BA & ANOR v NANYANG CONSTRUCTION

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